The housing market in Mississippi has been hard hit by the economic aftermath of Hurricane Katrina. Regardless of the reduction in the median price of housing, the state’s average home is still holding close to the median price of surrounding states including Alabama, Louisiana, Arkansas and Tennessee. The metropolitan areas of Jackson and Gulfport have long been the highest performing housing markets within the state and they continue to lead the state.The following information has been designed with Mississippi home buyers in mind and will provide you with information about the borrowing process in your state. Because each state operates independently in terms of lending laws that are outside the scope of federal housing laws, it is a good idea to familiarize yourself with the information below.
Continued Growth Improves Housing Market in Mississippi
Jackson is the capital city of Mississippi and it also has the highest rate of population growth among all other surrounding cities. Mississippi has the highest rate of growth of all states as a result of a huge influx of immigrants over recent years. This growth has definitely helped to keep Jackson on top of the state’s housing market.
Where to Live in Mississippi
Mississippi is riddled by economic strife and as mentioned earlier, the state was hit hard economically by Hurricane Katrina. Therefore the coastal cities are not among the best places to live within the state, with the exception of Gulfport. Most people prefer to live at least one hour inland from the coast, which gives them ready access to beaches and coastline but keep them out of the more economic challenged areas.
People who enjoy a big city with a lot to offer will probably prefer to live in Jackson. The town boasts many historic sites, museums and other cultural venues that other towns in Mississippi do not offer to residents or tourists.
Other cities that are popular for residents include Olive Branch, Southaven, Brandon and Biloxi.
Secured Interest Mississippi Mortgage Rates
Mortgages offered within Mississippi are generally secured interest, meaning that when a borrower contracts a mortgage loan through a lender, the lender retains an interest in the property and can utilize foreclosure to gain access to the property in the event that a buyer defaults.
Mortgage rates in Mississippi are on target with the rest of the country, although they tend to be about one-tenth of a percent higher on average. National lenders are offering slightly more competitive rates to highly qualified buyers who are looking to purchase more expensive homes within the state.
Non-Recourse Lending and What it Means to Residents
Non-Recourse lending means that the lender retains the right to foreclose upon properties purchased with a mortgage loan. They are then required to satisfy the debt with the sale of the foreclosed property. This means that the borrower cannot be sued for additional monies or property once the foreclosure process is complete.
There are exceptions to the rule of non-recourse lending in all states. One thing to make a note of is that if you have a mortgage that is backed by a federal agency, such as the FHA, a lender can get what is called a deficiency judgement to sue a borrower for the remaining balance of a mortgage should they default and the sale of the property is not enough to satisfy the loan balance.
Special Mortgages for Mississippi Borrowers
There are several different mortgages that are available to residents within the state of Mississippi. These include federal mortgage guarantees through the following agencies.
- Federal Housing Administration (FHA)
- U.S. Department of Agriculture (USDA)
- Veteran’s Administration (VA)
The FHA will offer first-time buyers within the state of Mississippi fixed-interest rates that are well below the national average. The USDA offers assistance to those purchasing agricultural property with the intention of having a specific rate of production.
Teachers within the state of Mississippi can take advantage of downpayment assistance through the Extra Credit Teacher Home Purchase Program. There is also a 35 year mortgage available to Mississippi home buyers that is known as an Interest Only PLUS loan. The advantage of this loan for borrowers is that the first five years require only payments of the interest. In five years, the loan converts to a 30-year fixed rate mortgage. This loan program is not open to all residents. It is focused on helping disabled borrowers or borrowers who are taking care of disabled children or other family members.
Non-Judicial Foreclosure Process in Mississippi
In Mississippi, the foreclosure process is almost always handles outside of the courts. This is why the state’s foreclosure process is known as non-judicial. Because the primary type of mortgage issued in the state is security interest, the lender has the right to sell the property as a result of borrower default and they do not need a judgment to seize the property.
The process of foreclosure begins when the lender notifies the borrower of their default status in writing. This must occur 30 days prior to the intended sale of the home. A trustee is placed in charge of the property and 30 days after notifying the homeowner, the property can be sold.
Within the 30 days prior to the sale of the property, the borrower can stop the foreclosure process immediately by either paying the past due amounts and charges or by working out an arrangement with the lender. Most lenders would prefer not to foreclose on properties and will work with borrowers who are experiencing temporary financial difficulties.
Rules Governing Foreclosure
In the state of Mississippi, lenders who have initiated the process of foreclosure are required to post public notice of the intended sale of a property once per week for three consecutive weeks. This is done by placing an ad in the local newspaper. The notice must contain the following information:
- Name of the borrower(s)
- Complete address of the property
- Time and place of the sale
- Specific requirements of sale
- Any additional information pertinent to the sale
What Happens at the Sale?
The trustee for the property can postpone the sale, if necessary by making an announcement at the originally scheduled sale. If there is no postponement, everyone interested in placing a bid on the property does so at the time of the sale and once the sale time has ended, the winning bidder is announced. The winning bidder is required to immediately pay for the property in cash or certified check. If they are unable to pay after winning, the sale is rescheduled.
If the lender is the winning bidder, they are not required to pay for the property at the time of the sale as they already hold a secured interest in the property. Most of the time, the lender is the high bidder and retains the rights to the foreclosed property.
The borrower can redeem the property at any point before the sale takes place. Because Mississippi is a non-recourse state, once the sale of the property is complete, the borrower has no opportunity to regain the property. Some states actually allow the borrower to reclaim their home after the sale is completed in some states, so this is important information to have when dealing with the foreclosure of your home.